Key Takeaways
- • China's National Development and Reform Commission (NDRC) has prohibited SoftBank's $5.4 billion acquisition of ABB's robotics division, according to ABB, which disclosed the decision on Thursday.
- • The block is the second major deal Beijing has stopped this year, following the order that Meta unwind its $2-billion-plus acquisition of AI startup Manus.
- • SoftBank had expected approval until it was informed last week of the prohibition, per the Financial Times, which first reported the decision.
- • The NDRC reportedly cited concern that robotics data could be transferred overseas and used to train AI models, including those of OpenAI, in which SoftBank is a major investor.
- • ABB shares fell 1.1% in morning trading, while SoftBank shares ended the day down 6.8%.
Summary
China's state planner has told Japanese investor SoftBank that it will not allow its $5.4 billion acquisition of the robotics segment of Swiss engineering group ABB to proceed, ABB said on Thursday. The Financial Times first reported the prohibition, saying SoftBank had expected the transaction to close until it was told last week that the National Development and Reform Commission had barred it. The NDRC reviews foreign investments that may carry national security implications. SoftBank declined to comment, and the NDRC did not immediately respond to a request for comment.
The decision is the second major deal blocked by Beijing this year, after Meta was ordered to unwind its $2-billion-plus acquisition of artificial intelligence startup Manus. It comes as China tightens scrutiny of foreign investment in domestic startups developing frontier technologies. According to the FT report, the NDRC was concerned that robotics data transferred overseas could be used to train AI models, including those developed by OpenAI, in which SoftBank is a major investor.
The ruling constrains SoftBank's ambitions in robotics, which Chief Executive Masayoshi Son has described as a core component of the company's AI investment strategy. ABB and SoftBank remain in close dialogue and are continuing to work on the transaction, ABB said. China is ABB's largest robotics market, accounting for around 30% of its robot-related business. ABB operates about 30 local companies in China with roughly 15,000 employees across nearly 130 cities, and its global robotics headquarters is based in Shanghai through ABB Engineering (Shanghai).
Market reaction was sharp. ABB shares were down 1.1% in morning trading after the news became public, while SoftBank shares had already fallen about 5% before the FT report and ended the day down 6.8%. The development follows closely on the withdrawal of a US initial public offering by SoftBank-backed digital-payments company OPay, which cited a regulatory inquiry by an unidentified foreign jurisdiction. OPay had been set to raise $304 million. Broader tensions also play a role: China and Japan have been in a diplomatic dispute since comments by Japanese Prime Minister Sanae Takaichi on Taiwan, after which China severely limited exports of critical minerals to Japan.
The decision is the second major deal blocked by Beijing this year, after Meta was ordered to unwind its $2-billion-plus acquisition of artificial intelligence startup Manus. It comes as China tightens scrutiny of foreign investment in domestic startups developing frontier technologies. According to the FT report, the NDRC was concerned that robotics data transferred overseas could be used to train AI models, including those developed by OpenAI, in which SoftBank is a major investor.
The ruling constrains SoftBank's ambitions in robotics, which Chief Executive Masayoshi Son has described as a core component of the company's AI investment strategy. ABB and SoftBank remain in close dialogue and are continuing to work on the transaction, ABB said. China is ABB's largest robotics market, accounting for around 30% of its robot-related business. ABB operates about 30 local companies in China with roughly 15,000 employees across nearly 130 cities, and its global robotics headquarters is based in Shanghai through ABB Engineering (Shanghai).
Market reaction was sharp. ABB shares were down 1.1% in morning trading after the news became public, while SoftBank shares had already fallen about 5% before the FT report and ended the day down 6.8%. The development follows closely on the withdrawal of a US initial public offering by SoftBank-backed digital-payments company OPay, which cited a regulatory inquiry by an unidentified foreign jurisdiction. OPay had been set to raise $304 million. Broader tensions also play a role: China and Japan have been in a diplomatic dispute since comments by Japanese Prime Minister Sanae Takaichi on Taiwan, after which China severely limited exports of critical minerals to Japan.
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